We investigate a dynamic advertising model where product quality is endogenous. In the differential game between single-product firms, there exists a parameter range where the low-quality firm uses a more efficient advertising technology and earns higher profits than the rival. Moreover, we show that equilibrium qualities are the same under duopoly, multiproduct monopoly and social planning, th...

We study the Markov perfect equilibrium (MPE) of an alternating move, infinite horizon duopoly model where the strategic variable is quantity. We exhibit a pair of differencedifferential equations that, when they exist, differentiable MPE strategies satisfy. For quadratic payoff functions, we solve these equations in closed form and demonstrate that the MPE corresponding to the solution is the ...

We analyze Hotelling’s duopoly model on the plane. There are two players (firms) located in different points inside a circle and the customers are distributed with some density in it. The solution of two game-theoretic problems is derived. The first problem is to find the equilibrium prices for the homogeneous goods, and the second problem is to find the equilibrium allocation of the players in...

We study communication in a static Cournot duopoly model under the assumption that firms have unverifiable private information about their costs. We show that cheap talk between the firms cannot transmit any information. However, if the firms can communicate through a third party, communication can be informative even when it is not substantiated by any commitment or costly actions. We exhibit ...

This paper studies a spatial duopoly model where customers are located at nodes and the demand functions are given for each node. For any fixed location of two firms, we analyze Bertrand-Nash equilibrium and derive a necessary and sufficient condition for the existence of equilibrium. We present an algorithm to compute all equilibria, provided profit functions have a finite number of peaks. The...

I investigate strategic interactions and market outcomes in the “agency model” and “wholesale model” of sales. Adopting the agency model initially raises prices, and can (but need not) raise the profits of rival retailers. Nonetheless, consumers prefer the agency model. I relate my results to events in the market for electronic books. I investigate the “agency model” and “wholesale model” of sa...